The U.S. Securities and Exchange Commission (SEC) charged the founder of now-defunct crypto and foreign exchange investment company PGI Global, with violating federal securities laws, alleging he ran a “Ponzi-like scheme” that defrauded investors of nearly $200 million — and spent $57 million of customer money on Lamborghinis, real estate and luxury goods.
Ramil Palafox, 59, of Las Vegas, Nevada, also faces parallel criminal charges tied to his role at PGI Global. In March, a Virginia grand jury charged him in a sprawling 23-count indictment that included eight counts of wire fraud. Due to what prosecutors described as Palafox’s “substantial ties” to the Philippines, including dual citizenship, the judge overseeing his criminal case issued an order on Tuesday that he should remain in custody until further notice.
According to court documents, PGI Global was a crypto investment scheme that ran from January 2020 to October 2021. Approximately 90,000 investors around the world purchased membership packages with either bitcoin or fiat currency that promised hefty returns on their investments — up to 3% daily and a 200% total return. But instead of actually investing his clients’ money, prosecutors say Palafox spent over a quarter of the funds unjustly enriching himself and his family members, and used the rest to pay back earlier investors in the scheme until it collapsed.
“Palafox used the guise of innovation to lure investors into lining his pockets with millions of dollars while leaving many victims empty-handed,” said Laura D’Allaird, chief of the SEC’s new Cyber and Emerging Technologies Unit, in a press statement. “In reality, his false claims of crypto industry expertise and a supposed AI-powered auto-trading platform were just masking an international securities fraud.”
Since the beginning of U.S. President Donald Trump’s second term in January, the SEC has overhauled its approach to crypto regulation, dropping investigations and some litigation against crypto companies tied to purported securities violations. But despite its about-face on the so-called “regulation-by-enforcement” practiced during former Chair Gary Gensler’s tenure, the SEC has promised that it will continue to go after crypto-related securities fraud.
Similarly, the DOJ has narrowed its approach to crypto-related prosecution, disbanding its crypto task force and instructing staff not to criminally charge regulatory violations in cases involving crypto. In a memo to staff last month, Deputy Attorney General Todd Blanche told prosecutors to focus their efforts on going after “individuals who victimize digital asset investors.”
In Palafox’s case, the SEC is aiming to get investors’ money back, plus interest and civil penalties, as well as get injunctive relief that would prevent him from similar crimes in the future. The SEC is also seeking to get money back from several of Palafox’s family members, including his wife, Marissa Mendoza Palafox, and his brother-in-law, Darvie Mendoza.
In a submission to the court, the DOJ has said that Palafox — if found guilty — is facing “at least 108-135 months’ imprisonment,” or 9 to 11 years.
Palafox’s lawyer declined to comment.